Real Estate Update: Fibra Monterrey

Last week Friday (1/13/25), Fibra Monterrey announced that it has called a holders’ meeting to propose a significant increase in the maximum authorized amount of its issuance program, raising it to P$70 billion from P$20 billion. This change would allow the number of outstanding CBFIs to increase to up to 6,136 million from 1,753 million. The company clarified that no other terms of the program would be modified, and that the additional flexibility is intended to enable future issuances of CBFIs or Cebures under the existing approved framework. The unitholders’ meeting is scheduled for January 29, and earlier this week (1/19/26) the company hosted a call with analysts to provide further clarification.

We expect Fibra Monterrey to execute a potential follow-on offering within the short-to-medium term. The recent announcement is, in our view, a reflection of the company's solid growth path across the years, with more upcoming opportunities ahead. The current shelf registration, approved in 2022, is for P$20 billion; however, management noted that capacity under the existing program was very tight, which could have constrained the size of a future offering, particularly given the number of investment opportunities currently under evaluation. Historically, the deployment period for follow-on proceeds averages approximately seven months, and to date the company has already deployed roughly 92% of the proceeds from the prior follow-on March 2024.

On the growth front, demand for industrial properties remains strong in Mexico in spite of the current trade uncertainty, supported by the relationship between Mexico and other countries, especially the US. The company’s investment mix is expected to remain broadly consistent, with approximately 80% stabilized assets and 20% expansions or BTS developments, alongside a higher exposure to logistics assets (30–40%).

Depending on the amount of capital raised, the company could increase leverage to keep LTV broadly in line with current levels of 26% which would otherwise decline to ~22% without incremental debt). Additionally, expansion projects have progressed more slowly, but tenants are increasingly unwilling to wait, and the company is currently advancing 2–3 relevant expansion projects following c.18 months of negotiations. This transaction would deliver structural scale benefits, supported by FMTY’s internalized structure, which should enhance operating returns. In addition, depending on international investor appetite, average daily trading volume (ADTV) could potentially double to approximately USD 4 million, according to the company.

We reiterate our Outperform rating and P$17 price target. As outlined in our recently published 2026 Outlook, we view FMTY as solidly positioned to capture a recovery in investment flows as progress is made on the USMCA, which we expect could materialize in 2H26. In addition, increasing e-commerce penetration—where Mexico remains among the fastest-growing markets globally—continues to support demand for logistics and industrial assets within FMTY’s portfolio. A more favorable interest-rate environment, together with stronger growth dynamics in the Bajío and Northern regions, should further support operating performance and portfolio expansion.